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An immediate reset is required to address talent shortfall, says policy think tank.
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Skilled migration system ‘unfit for purpose’
01 September 2022
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Australia’s immigration system has been playing catch-up since borders reopened and is no longer fit for purpose, a report by the Committee for Economic Development of Australia (CEDA) said.
To re-enter the global talent race and address “critical skill gaps” the system needs an immediate reset and the Jobs and Skills Summit, which kicks off in Canberra today (1 September), is just a first step.
The report, “Unlocking Skilled Migration”, said much of the pre-summit focus on migration has been on lifting permanent migration caps, but Australia needed a much more efficient skilled migration system now to address the shortages.
“Businesses and prospective migrants are encountering a system that is cumbersome, complex and uncertain,” said CEDA chief economist Jarrod Ball.
“Businesses are increasingly resorting to labour agreements with the federal government, as standard temporary or permanent visa programs fail to meet their needs. There are over 1,000 such agreements currently in place, increasing almost two-fold in the last 18 months.”
The report said while changes in policies to increase labour supply and promote skill acquisition for the local workforce had to play a role, it was impossible to address these issues in both the short and long term without a significant role for migration.
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“It will be vital to lift capacity and realise potential growth and investment opportunities in the short-term with official forecasts suggesting economic growth will slump below 2 per cent by the end of next year,” said the report.
“Historically, migrants have supplied a third of the increased skills requirements of the Australian economy and given Australia’s ageing population we should expect this trend to accelerate in the future.
“In addition, skilled migration has facilitated the transfer of knowledge, skills and international connections to Australian workers and businesses.”
CEDA said net overseas migration would take until 2024 to fully recover from pandemic disruptions and since mid-2020 Australia had lost more than 600,000 people, 83 per cent of whom are generally of working age and highly skilled.
Mr Ball said the current immigration system was bogged down, cruelling the chances of businesses to recruit and potential migrants to make the trip.
“While interest in migrating to Australia is recovering, prolonged administrative delays and uncertainty risk cruelling the pitch to prospective migrants at a critical juncture in the recovery of global migration flows,” Mr Ball said.
“Furthermore, the administrative visa backlog is significant — blowing out waiting times and requiring substantial administrative effort to resolve.
“This comes on top of negative sentiment regarding Australia’s stringent border policies and lack of income support for temporary migrants during the pandemic, in contrast to Canada and the UK.”
Australia’s migration system had to be overhauled over the longer term to focus on skills needs rather than occupations and clear pathways to permanency for temporary migrants.
But Australia had to move quickly “with the right signals and settings” because global interest in migrating here had failed to recover to pre-pandemic levels.
CEDA said Australia had to remain competitive against other destinations because our demand for skills would continue into the future, and called for immediate reforms to the migration system including:
“A visa backlog action plan in the October budget to provide greater certainty and confidence to prospective migrants;
“A streamlined path for intra-company transfers of employees to Australia;
“A specific Essential Skills Visa to address the caring workforce deficit;
“Consolidating the multiple skilled occupation lists to one expansive list with a consistent pathway to permanent residency; and
“Ensuring Jobs and Skills Australia have responsibility to advise on areas of training need and report on how training funds are allocated.”
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